We have been through the Movement Control Order (MCO) for more than a month now. And just last week, the government has announced to loosen the regulations and allow most of the businesses to resume their operations again.
The challenge during the MCO is not only about health hazards, but also economic challenges. We may have been able to strive through the darkest hours of the pandemic in terms of health. But the economic hazard has just about to begin.
Since the beginning of the MCO until now, it has affected almost every industry economically. The first few weeks have not been extremely tough for some companies yet as it can still be considered a short term loss. But when they couldn’t resume their business weeks after weeks, and yet they still have to bear operating costs, that is when the pain comes in.
Business owners and the management have to figure out ways to cut operating costs to reduce losses. Businesses with multiple offices have to consolidate their human resource into one office to reduce unnecessary usage of utilities. Some have to resort to negotiating with their employees to take unpaid leaves. Certain companies have to close off some of their branches. Some have to retrench their employees. The worst is to make their decision to close down their businesses permanently.
The tourism industry has been one of the worst affected ones. There are no flights, airlines are not in operations. No traveling means no tourists, and which makes hotels unable to continue their operations. The impact is very obvious in Malaysia as we have seen hotels closing down permanently one after another.
As of now, there are about 10 hotels that have decided to close down permanently in Penang, Ipoh and Kuala Lumpur. Malaysian Association of Hotels are expecting about 15% of hotels may have to shut down their operations.
This is only the beginning, and we’ll never know what will happen for the next few months. Although we may continue most of our business operations, the tourism industry may not be resumed yet. Traveling is still limited, even for inter-state travels. And even when tourism is allowed to resume, there won’t be many tourists that would want to take the risk yet; or perhaps the economic difficulties that were suffered might prevent people from traveling within this short period. The order that prevents large gatherings also caused the loss of hotels’ food & beverage department.
Besides that, the retail sector has also been affected badly as we can see the apparel brand, Esprit pulling out from Asia, and Esquel Group closing their operations in Malaysia.
These are the huge companies and brands that are announced in the media. We might now know how many of the other small business owners that may have to close down.
Despite the negative economic situations that we may see now, perhaps we can also see the light at the end of the tunnel.
In every major economic challenge that our community faces, there is always an opportunity to overturn. The losses of some businesses today, might be an opportunity to grow new ones.
This MCO has ‘created’ a number of homemakers into small entrepreneurs. Those who have nothing to do at home have spent their time making their own products, cooking meals and creating brands to sell on the internet. I am sure almost all of us who are using Facebook have seen a lot of friends and family selling their own products during this period.
It has proven that Malaysians are able to develop their own products and brands. But what can the Government assist from here?
Governments always feel proud and boast their numbers of Foreign Direct Investment (FDI) every quarter and every year. It is always good to have foreign companies investing in our country. But to think again, these companies might not have anything to do with our community other than earning profits. When operating at a loss or when it is not cost-efficient to operate in the country anymore, the management can easily close down the operations. Esprit and Esquel might be an example.
Perhaps the Government should look into assisting Malaysians to grow their own brands and products into the standards whereby in the future we are the ones investing in other countries instead of us looking for investment from other countries.
We have to look into the ideas and talents that may grow from these small and young online entrepreneurs. The Government has to tap into the passion of these young entrepreneurs, make that little spark in them into a fire by giving them necessary assistance. We can begin by drafting more public policies that promote entrepreneurship.
I believe that many of our own products have the quality that equals the big brands out there. But what we lack is knowledge of building brands, opportunity, and trust of our own people.
The confidence towards Malaysian brands have grown compared to decades ago, but it is too slow to expand ourselves to compete with the international market.
I have always reiterated that in building a nation, it is not only the role of a Government, but our own community and people.
To rebuild our economy post-MCO, one of the most important factors is for ourselves to support the local economy. Buy from local makers, brands and shops.
It may be a real challenge, and although we might want to see our economy striving again as soon as possible, I think the call to loosen the MCO regulations in such a sudden contrast is very risky. It should be done in phases in different industries.
Do we want to risk another wave of infections and start all over again? But a decision has been made, let’s do our part to keep our nation safe and hope for the best.
This article is published in Kwong Wah Yit Poh in Chinese dated 5 May 2020.